Analysts Express Skepticism of Chavez's OPEC Tour

Analysts Express Skepticism of Chavez's OPEC Tour

Article excerpt

LONDON (AP) -- By personally visiting each of his OPEC
counterparts, Venezuelan President Hugo Chavez hopes to raise his
country's profile within the fractious, 11-nation oil producers'
cartel.

But analysts said Wednesday that the fiery populist's diplomatic
tour is unlikely to have an adverse impact on already-high crude
prices or on OPEC's current production policy.

Chavez is trying to stake out a more active role for Venezuela
within the Organization for Petroleum Exporting Countries. Venezuela
is OPEC's only South American member and the world's third-largest
petroleum exporter; it's also a major supplier of crude to the
United States.

Long regarded as an aggressive quota-buster, Venezuela under
Chavez has changed course and taken a leading role in pushing for
OPEC production cuts as a way to firm up prices and keep them high.

Chavez departed Sunday with the aim of inviting his fellow OPEC
heads of state to a summit next month in Caracas, the Venezuelan
capital.

"By having a diplomatic meeting, they're ratcheting OPEC up one
notch from a producers' cartel to a quasi-diplomatic organization.
It's a rare occurrence," said Peter Gignoux, head of the petroleum
desk at Salomon Smith Barney in London.

Other analysts expressed a similar skepticism about Chavez's OPEC
tour, suggesting it's more of a flag-waving exercise than an
opportunity to engage in serious talks about oil production and
pricing targets.

Iraq and Libya are among the more controversial stopovers
scheduled on a breakneck trip to 10 countries in as many days.
Chavez's first and most important call was on Saudi Arabia, the
world's No. 1 oil producer.

Saudi Arabia angered many of its OPEC partners last month when it
announced plans to pump an additional 500,000 barrels a day in an
effort to trim prices and ease the financial pain for oil importing
countries.

When Chavez met Monday with Saudi King Fahd and Crown Prince
Abdullah, the two sides appeared to paper over their differences.

A Venezuelan source who spoke on condition of anonymity said they
agreed that OPEC's current output was sufficient. However, the
source didn't say if the acceptable level of output included the
excess Saudi production. …